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Merger between Vestjysk Bank A/S and Den Jyske Sparekasse A/S

News Provided by GlobeNewswire2020-11-26

The Danish Financial Supervisory Authority

Nasdaq Copenhagen A/S 26 November 2020

Merger between Vestjysk Bank A/S and Den Jyske Sparekasse A/S

The boards of directors of Vestjysk Bank and Den Jyske Sparekasse have today resolved to seek a merger of the two banks. In that connection, the banks have signed a merger agreement and a joint merger plan and merger statement. The merger is recommended for adoption at extraordinary general meetings of both banks.

The merged bank will become the 8^th largest bank in Denmark (in terms of working capital) and one of the largest locally anchored banks in Denmark with a balance of DKK 38bn. and a total business volume of DKK 127bn. The purpose of the merger is to strengthen the two banks' positions as strong local banks.

As consideration for the merger, the shareholders of Den Jyske Sparekasse will receive 34 shares in Vestjysk Bank and a cash amount of DKK 28.17 per share in Den Jyske Sparekasse.

The boards of directors of both banks unanimously support the merger and recommend that all shareholders of the two banks vote in favour of the implementation of the merger.

Aktieselskabet Arbejdernes Landsbank, AP Pension Livsforsikringsaktieselskab and Nykredit Realkredit A/S are major shareholders of both banks and they all support the implementation of the merger; and so do Finansiel Stabilitet and the five private foundations, Den Jyske Sparekasses StÃ¸ttefond, Sparekassen LÃ¸gumklosters Fond, Jelling Sparekasses Fond, Fonden for Sparekassen FarsÃ¸ and Fonden for Sparekassen i Skals, who are a major shareholder and significant shareholders, respectively, of Den Jyske Sparekasse. This means that, in total, advance undertakings representing 66.1% of the share capital in Vestjysk Bank and 54.9% of the share capital in Den Jyske Sparekasse
Â have been obtained subject to the satisfaction of certain conditions from shareholders.

Kim Duus, chairman of the board of directors of Vestjysk Bank, says:

â€The merger allows us to become Denmark's strongest local bank. Today, we are local banks with a strong commitment to the area in which we operate and with a good knowledge of our customers. The merger allows us to continue being local while also ensuring that we are in a stronger position to the benefit of our customers, shareholders and employeesâ€.

Niels Fessel, chairman of the board of directors of Den Jyske Sparekasse, says:

â€A merger between Den Jyske Sparekasse and Vestjysk Bank is the right decision at the right time. In addition to our local anchoring, we have shared values, and our geographical locations complement each other to a great extent. The merger will open up new opportunities for us which we would not have if we were on our own.â€

As a result of the merger, a larger scale will be obtained and, consequently, better opportunities to develop and offer new services and products to customers and significant synergies as a result of e.g. joint headquarters, joint functions and lower data centre costs. The merger also leads to a better geographical coverage in central and western Jutland and in several large cities, including Aarhus, Esbjerg, Vejle, Viborg, Herning, Kolding, Randers and Horsens. The two banks only have branches in a few of the same cities.

The merger is expected to lead to overall synergies of approx. DKK 150m per year. Non-recurring costs related to the merger is expected to amount to approx. DKK 200m.

The merged bank

Vestjysk Bank will be the surviving bank and will continue under the name and logo of Vestjysk Bank. The plan is for the surviving bank to be headquartered in the Municipality of Herning. In connection with the implementation of the merger, all assets and liabilities of Den Jyske Sparekasse will be transferred to Vestjysk Bank.

The two boards of directors agree that the board of directors and committees of the surviving bank will be composed with equal representation, with Kim Duus as the chairman of the board of directors and Niels Fessel as vice-chairman. The parties have also agreed that Jan UlsÃ¸ Madsen will become CEO of the surviving bank and that Claus E. Petersen will become deputy CEO. Moreover, the executive board will consist of managing director Michael N. Petersen and managing director Torben SÃ¸rensen.

Exchange ratio

The merger will be implemented according to a exchange ratio according to which the shareholders of Den Jyske Sparekasse will receive 34 shares in Vestjysk Bank and a cash amount of DKK 28.17 per share in Den Jyske Sparekasse.

The consideration offered for the shares in Den Jyske Sparekasse has a total value of DKK 124.7 based on the weighted average price for the shares in Vestjysk Bank over the past three months and corresponds to a premium of 63.4% in proportion to the weighted average price for the shares in Den Jyske Sparekasse over the past three months.

For the purpose of implementing the exchange of shares, new shares in Vestjysk Bank will be issued to the shareholders of Den Jyske Sparekasse.

The merger will be carried out as a taxable merger without retroactive effect for tax purposes. This means, for example, that, in connection with the merger, the shareholders of Den Jyske Sparekasse will be deemed to have sold their shares in Den Jyske Sparekasse and, therefore, they may be liable to pay tax with respect to any gain in that connection. Moreover, dividend tax may, to a certain extent, be withheld in relation to the cash consideration paid for the shares in Den Jyske Sparekasse owned by companies, funds and certain foreign persons and for shares owned via omnibus or nominee custody accounts.

Conditions for implementation of merger

The implementation of the merger is subject to the general meetings of the two banks passing the implementation of the merger at the extraordinary general meetings.

The merger is also subject to obtaining approval from the Danish Financial Supervisory Authority and from the Danish Competition and Consumer Authority.

Aktieselskabet Arbejdernes Landsbank maintains its ownership interest

The boards of directors of Vestjysk Bank and Den Jyske Sparekasse have been informed that Aktieselskabet Arbejdernes Landsbank, who is a major shareholder of both banks, has entered into conditional share purchase agreements concerning purchase of shares in the merged bank with Finansiel Stabilitet, AP Pension Livsforsikringsaktieselskab, Nykredit Realkredit A/S and the five private foundations. The agreements entail that, immediately after the implementation of the merger, Aktieselskabet Arbejdernes Landsbank is expected to maintain its ownership interest in Vestjysk Bank of 32.4%. Finansiel Stabilitet sells all its shares in that connection and, therefore, Finansiel Stabilitet is not expected to be a shareholder of the surviving bank.

Timetable and documents

Today, Vestjysk Bank and Den Jyske Sparekasse have published the merger documents attached to this announcement which are required under Danish company law and which are also available on the two banks' websites.

No prospectus will be published, but a merger announcement is expected to be published to the market on 17 December 2020.

It is expected that the approval from the Danish Competition and Consumer Authority is obtained before the holding of the extraordinary general meetings.

It is the intention that extraordinary general meetings will be held in both banks on 13 January 2021 at which resolutions to implement the merger will be voted on. If the merger is passed at the respective general meetings and the Danish Financial Supervisory Authority authorises the implementation of the merger, the merger is expected to be registered with the Danish Business Authority on 14 January 2021.

Accordingly, 14 January 2021 is expected to be the last day of trading of the shares in Den Jyske Sparekasse on Nasdaq Copenhagen, and the new shares in Vestjysk Bank are expected to be admitted to trading and official listing on Nasdaq Copenhagen on 15 January 2021.

Selected financial figures

A list of selected financial information for the two banks based on the published quarterly reports for Q4 2019 to Q3 2020 is attached.

Conference call

A conference call for analysts will be held on 26 November at 1:30 p.m. (Danish time) during which CEO Jan UlsÃ¸ Madsen and CEO Claus E. Petersen will elaborate on the background for the merger plans.

Please use this link to register for and participate in the conference call: https://event.loopup.com/SelfRegistration/registration.aspx?booking=GxlWTuUCB6Ho5fvJephpMWex9Hr34t0L8eQ4dVD8u8s=.

Communications

For further comments: Please contact Thomas Juul-Dam, Managing Partner of Primetime, on +45 3080 3442 or Karsten Anker Petersen, Head of Public Affairs of Primetime, on +45 6166 4944.

Vestjysk Bank A/S

Den Jyske Sparekasse A/S

Attached files (attached files are only available in Danish):

Joint merger plan and merger statement
Draft new articles of association of the surviving bank
Statement by valuation expert on the joint merger plan and merger statement
Declaration by valuation expert on creditors' position
Audited interim balance sheets for Vestjysk Bank and Den Jyske Sparekasse as of 30 September 2020
Compilation of the past four quarters from Q4 2019 to Q3 2020 for Vestjysk Bank, Den Jyske Sparekasse and pro forma (continuing bank)

Attachments

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